SoFi Technologies (NASDAQ:SOFI) is once again one of today’s top movers for all the wrong reasons. Shares of the fintech stock are down another 4% in today’s session after SOFI stock plunged roughly 10% yesterday following the company’s earnings report.
Today’s move appears to be tied to a key downgrade from Deutsche Bank analyst Mark DeVries, who lowered his price target on the stock to $11 from $12. This analyst did maintain a “hold” rating, but it’s clear that Wall Street is souring on the up-and-coming fintech company.
Let’s dive more into this analyst call and why investors appear to be in selling mode when it comes to SoFi today.
SOFI Stock Dips on Analyst Downgrade
Some of the Deutsche Bank analyst’s commentary here is particularly noteworthy. DeVries appears to be focusing more on the near-term momentum behind SOFI stock and a lack of a catalyst that could take shares higher over the next year. This analyst did point out that the stock looks undervalued from a relative perspective. And its current share price does offer an upside based on SoFi’s fundamentals. However, a deteriorating outlook provided by the company, as well as other macro headwinds ahead, could spell trouble for investors looking to buy at current prices.
Now, an $11 price target still implies roughly 60% upside from current levels. Accordingly, one could make the argument that this hold recommendation is relatively bullish, given the rather minor price target cut and where shares currently trade.
Still, it’s clear that while risks may be relatively balanced (in analysts’ view), it’s also true that this market has been a momentum machine this year. That could mean that more stocks may look more like value traps than investments to value investors. This is the take that makes the most sense to me, as this selloff is starting to look overblown.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.